<PAGE>
As filed with the Securities and Exchange Commission on May 12, 2000
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
WHITMAN CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 13-6167838
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3501 ALGONQUIN ROAD 60608
ROLLING MEADOWS, ILLINOIS (Zip Code)
(Address of principal executive offices)
WHITMAN CORPORATION 2000 STOCK INCENTIVE PLAN
(Full title of the plan)
STEVEN R. ANDREWS
Senior Vice President, Secretary and General Counsel
Whitman Corporation
3501 Algonquin Road
Rolling Meadows, Illinois 60008
(312) 818-5000
(Name, address, and telephone number,
including area code, of agent for service)
----------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------- ----------------------- ------------------------- ------------------------ ------------------
Proposed Maximum Proposed Maximum Amount of
Title of Securities Amount to be Offering Price Per Aggregate Offering Registration Fee
to be Registered Registered Share Price
- ---------------------- ----------------------- ------------------------- ------------------------ ------------------
<S> <C> <C> <C> <C>
Common Stock, 8,000,000 shares (1) $12.05 (2) $96,404,814 (2) $25,451 (2)
$.01 par value
- ---------------------- ----------------------- ------------------------- ------------------------ ------------------
Preferred Stock 8,000,000 rights (3) (3) (3)
Purchase Rights
- ---------------------- ----------------------- ------------------------- ------------------------ ------------------
</TABLE>
(1) This registration statement also covers such additional and indeterminate
number of shares as may become issuable because of the provisions of the
employee benefit plans described herein relating to adjustments for changes
resulting from a stock dividend, stock split or similar change.
(2) Estimated solely for the purpose of calculating the registration fee and,
pursuant to Rules 457(c) and 457(h) under the Securities Act of 1933,
based upon the average of the high and low sale prices of the Common Stock
reported in the consolidated reporting system on May 8, 2000 and the
weighted average exercise price of outstanding options granted under the
plan.
(3) Rights to purchase Series A Junior Participating Preferred Stock (the
"Rights") initially are attached to and trade with the shares of Common
Stock being registered hereby. Value attributable to such Rights, if any,
is reflected in the market price of the Common Stock.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed with the Securities and
Exchange Commission (the "Commission") by Whitman Corporation, a Delaware
corporation (the "Company"), are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
January 1, 2000;
(b) All of the Company's other reports filed pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), since January 1, 2000; and
(c) The description of the Common Stock, $.01 par value, of the Company
(the "Common Stock") and the description of the Preferred Stock
Purchase Rights of the Company (the "Rights") associated with the
Common Stock, contained in registration statements filed by the
Company to register the Common Stock and the Rights under the
Exchange Act, including any amendments or reports filed for the
purpose of updating such descriptions.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of
this registration statement and prior to the filing of a post-effective
amendment to this registration statement which indicates that all securities
offered hereby have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference into this
registration statement and to be a part hereof from the respective dates of
filing of such documents (such documents, and the documents listed above,
being hereinafter referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed
to be modified or superseded for purposes of this registration statement to
the extent that a statement contained herein or in any other subsequently
filed Incorporated Document modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this registration statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
2
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
permits indemnification of directors, officers, employees and agents of
corporations under certain conditions and subject to certain limitations.
Article V of the Company's By-Laws provides for indemnification of any
director, officer, employee or agent of the Company, or any person serving in
the same capacity in any other enterprise at the request of the Company,
under certain circumstances. Article NINTH of the Company's Certificate of
Incorporation eliminates the liability of directors of the Company under
certain circumstances for breaches of fiduciary duty to the Company and its
shareholders.
Directors and officers of the Company are insured, at the expense of
the Company, against certain liabilities which might arise out of their
employment and which might not be subject to indemnification under the
By-Laws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C>
4.1 Certificate of Incorporation of the Company, as amended and restated
on May 20, 1999, is hereby incorporated by reference to Exhibit 3a to
the Company's Quarterly Report on Form 10-Q for the quarter ended
July 3, 1999 (commission file number 1-15019)
4.2 By-Laws of the Company, as amended and restated on May 20, 1999, are
hereby incorporated by reference to Exhibit 3b to the Company's
Quarterly Report on Form 10-Q for the quarter ended July 3, 1999
(commission file number 1-15019)
4.3 Rights Agreement, dated as of May 20, 1999, between the Company and
First Chicago Trust Company of New York, is hereby incorporated by
reference to Exhibit 4 to the Registration Statement on Form 8-A
filed by the Company with the Commission on May 25, 1999 (commission
file number 1-15019)
4.4* Whitman Corporation 2000 Stock Incentive Plan
4.5* Form of Non-Qualified Stock Option Agreement
5* Opinion of Sidley & Austin
23.1* Consent of KPMG LLP (Chicago)
23.2 Consent of Sidley & Austin (contained in Exhibit 5)
24 Powers of Attorney (contained in the signature pages hereto)
</TABLE>
- -----------------------
* Filed herewith
3
<PAGE>
ITEM 9. UNDERTAKINGS.
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the
"Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would
not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof;
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The Company hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
BONA FIDE offering thereof.
4
<PAGE>
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Rolling
Meadows, State of Illinois, on the 4th day of May, 2000.
WHITMAN CORPORATION
By: /s/ Martin M. Ellen
-----------------------------------------
Martin M. Ellen
Senior Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Steven R. Andrews, and Martin M.
Ellen, and each of them, his or her true and lawful attorney-in-fact and
agent with full power of substitution for him or her and in his or her name,
place and stead, in any and all capacities to sign any and all amendments
(including pre-effective and post-effective amendments) to this Registration
Statement, and to file the same with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, grants
unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she
might or could do in person, and hereby ratifies and confirms all that said
attorneys-in-fact and agents or their substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the 4th day of May, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
<S> <C>
/s/ Bruce S. Chelberg Chairman and Chief Executive Officer
- ----------------------------- (principal executive officer)
Bruce S. Chelberg
/s/ Martin M. Ellen Senior Vice President and Chief Financial
- ----------------------------- Officer (principal financial and accounting
Martin M. Ellen officer)
6
<PAGE>
/s/ Herbert M. Baum Director
- -----------------------------
Herbert M. Baum
/s/ Richard G. Cline Director
- -----------------------------
Richard G. Cline
/s/ Pierre S. Du Pont Director
- -----------------------------
Pierre S. du Pont
/s/ Archie R. Dykes Director
- -----------------------------
Archie R. Dykes
/s/ Charles W. Gaillard Director
- -----------------------------
Charles W. Gaillard
/s/ Jarobin Gilbert, Jr. Director
- -----------------------------
Jarobin Gilbert, Jr.
/s/ Victoria B. Jackson Director
- -----------------------------
Victoria B. Jackson
/s/ Robert F. Sharpe, Jr. Director
- -----------------------------
Robert F. Sharpe, Jr.
/s/ Karl Von Der Heyden Director
- -----------------------------
Karl von der Heyden
</TABLE>
7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C>
4.1 Certificate of Incorporation of the Company, as amended and restated
on May 20, 1999, is hereby incorporated by reference to Exhibit 3a to
the Company's Quarterly Report on Form 10-Q for the quarter ended
July 3, 1999 (commission file number 1-15019)
4.2 By-Laws of the Company, as amended and restated on May 20, 1999, are
hereby incorporated by reference to Exhibit 3b to the Company's
Quarterly Report on Form 10-Q for the quarter ended July 3, 1999
(commission file number 1-15019)
4.3 Rights Agreement, dated as of May 20, 1999, between the Company and
First Chicago Trust Company of New York, is hereby incorporated by
reference to Exhibit 4 to the Registration Statement on Form 8-A
filed by the Company with the Commission on May 25, 1999 (commission
file number 1-15019)
4.4* Whitman Corporation 2000 Stock Incentive Plan
4.5* Form of Non-Qualified Stock Option Agreement
5* Opinion of Sidley & Austin
23.1* Consent of KPMG LLP (Chicago)
23.2 Consent of Sidley & Austin (contained in Exhibit 5)
24 Powers of Attorney (contained in the signature pages hereto)
</TABLE>
- ----------------------
* Filed herewith
8
<PAGE>
EXHIBIT 4.4
WHITMAN CORPORATION 2000 STOCK INCENTIVE PLAN
<PAGE>
WHITMAN CORPORATION
2000 STOCK INCENTIVE PLAN
(APPROVED FEBRUARY 18, 2000 BY BOARD OF DIRECTORS)
1. DEFINITIONS
The following definitions shall be applicable throughout this Plan:
(a) "Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time. Reference in the Plan to any section of the
Code shall be deemed to include any amendments or successor provision to
such section and any regulations under such section.
(b) "Committee" shall mean the Committee selected by the Board of Directors
as provided in Paragraph 4, consisting of two or more members of the
Board of Directors, each of whom may be (i) a "Non-Employee Director"
within the meaning of Rule 16b-3 under the Exchange Act, and (ii) an
"outside director" within the meaning of Section 162(m) of the Code.
(c) "Common Stock" shall mean common stock of the Corporation, $.01 par
value.
(d) "Corporation" shall mean Whitman Corporation, a Delaware corporation.
(e) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(f) "Holder" shall mean an individual who has been granted an Option,
Restricted Stock Award or Performance Award.
(g) "Option" shall mean any option granted under the Plan for the purchase
of Common Stock.
(h) "Performance Award" shall mean an award of Common Stock or cash granted
under the Performance Award provisions of the Plan.
(i) "Performance Measures" shall mean the criteria and objectives,
established by the Committee, which shall be satisfied or met during the
applicable performance period as a condition to (i) the receipt of an
Option or SAR, (ii) the exercisability of all or a portion of an Option
or SAR, (iii) the vesting of shares of Common Stock subject to a
Restricted Stock Award or (iv) the receipt of shares of Common Stock
and/or cash with respect to a Performance Award. Such criteria and
objectives may include one or more of the following: stock price, the
attainment by a share of Common Stock of a specified fair market value
for a specified period of time, capitalization, earnings per share,
growth in stock price, growth in market value, return to stockholders
(including or excluding dividends), return on equity, earnings, earnings
per share, economic value added, revenues, net income, operating income,
return on assets, return on capital, return on sales, market share, cash
flow measures or cost reduction goals, or any combination of the
foregoing. If the Committee desires that compensation payable pursuant to
any award under the Plan be qualified performance-based compensation
under Section 162(m) of the Code and the rules and regulations
thereunder, the Performance Measures (i) shall be established by the
Committee no later than 90 days after the first day of the performance
period (or such other time permitted under Section 162(m) of the Code)
and (ii) shall satisfy all other applicable requirements imposed under
Treasury Regulations promulgated under Section 162(m) of the Code,
including the requirement that such Performance Measures be stated in
terms of an objective formula or standard. The Performance Measures
determined by the Committee shall be established prior to the beginning
of each performance period but, except as necessary to qualify a
Performance Award as "performance-based compensation" under
Section 162(m) of the Code and the rules and regulations thereunder, may
be subject to such later revisions to reflect significant, unforeseen
events or changes, as the Committee shall deem appropriate.
(j) "Plan" shall mean the Corporation's 2000 Stock Incentive Plan, as
amended from time to time.
(k) "Restricted Stock Award" shall mean an award of Common Stock granted
under the Restricted Stock Award provisions of the Plan.
<PAGE>
(l) "Retirement" shall mean cessation of active employment or service with
the Corporation or a subsidiary pursuant to the Corporation's retirement
policies and programs.
(m) "SAR" shall mean a stock appreciation right which is issued in tandem
with, or by reference to, an Option, which entitles the Holder thereof to
receive, upon exercise of such SAR and surrender for cancellation of all
or a portion of such Option, shares of Common Stock, cash or a
combination thereof with an aggregate value equal to the excess of the
fair market value of one share of Common Stock on the date of exercise
over the purchase price specified in such Option, multiplied by the
number of shares of Common Stock subject to such Option, or portion
thereof, which is surrendered.
2. PURPOSE
It is the purpose of the Plan to provide a means through which the
Corporation may attract able persons to enter its employ and the employ of its
subsidiaries, to serve as directors and to provide a means whereby those persons
upon whom the responsibilities of the successful administration and management
of the Corporation or its subsidiaries rest, and whose present and potential
contributions to the welfare of the Corporation or its subsidiaries are of
importance, can acquire and maintain stock ownership. Such persons should thus
have a greater than ordinary concern for the welfare of the Corporation and/or
its subsidiaries and would be expected to strengthen and maintain a desire to
remain in the employ or service of the Corporation or its subsidiaries. It is a
further purpose of the Plan to provide such persons with additional incentive
and reward opportunities designed to enhance the profitable growth of the
Corporation. So that the maximum incentive can be provided each participant in
the Plan by granting such participant an Option or award best suited to such
participant's circumstances, the Plan provides for granting "incentive stock
options" (as defined in Section 422 of the Code) and nonqualified stock options
(with or without SARs), Restricted Stock Awards and Performance Awards, or any
combination of the foregoing.
3. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall be submitted to the stockholders of the Corporation for
approval and, if approved by the affirmative vote of a majority of the shares of
Common Stock present in person or represented by proxy at the 2000 annual
meeting of stockholders, shall become effective on the date of approval by the
Board of Directors. The Plan shall remain in effect until all Options granted
under the Plan have been exercised, all restrictions imposed upon Restricted
Stock Awards have been eliminated and all Performance Awards have been
satisfied.
4. ADMINISTRATION
The members of the Committee shall be selected by the Board of Directors to
administer the Plan. A majority of the Committee shall constitute a quorum.
Subject to the express provisions of the Plan, the Committee shall have
authority, in its discretion, to determine the individuals to receive Options
(with or without SARs), Restricted Stock Awards and Performance Awards, the time
or times when they shall receive them, whether an "incentive stock option" under
Section 422 of the Code or nonqualified option shall be granted, the number of
shares to be subject to each Option and Restricted Stock Award and the value of
each Performance Award. In making such determinations the Committee shall take
into account the nature of the services rendered by each individual, such
individual's present and potential contribution to the Corporation's success,
and such other factors as the Committee shall deem relevant.
The Committee shall have such additional powers as are delegated to it by
the other provisions of the Plan and, subject to the express provisions of the
Plan, to construe the respective Option, Restricted Stock Award and Performance
Award agreements and the Plan, to prescribe, amend and rescind rules and
regulations relating to the Plan and to determine the terms, restrictions and
provisions of the Option, Restricted Stock Award and Performance Award
agreements (which need not be identical) including such terms, restrictions,
Performance Measures and provisions as shall be requisite in the judgment of the
<PAGE>
Committee to cause certain Options to qualify as "incentive stock options" under
Section 422 of the Code, and to make all other determinations necessary or
advisable for administering the Plan. The Committee may, in its sole discretion
and for any reason at any time, subject to the requirements imposed under
Section 162(m) of the Code and regulations promulgated thereunder in the case of
an award intended to be qualified performance-based compensation, take action
such that (i) any or all outstanding Options shall become exercisable in part or
in full, (ii) all or some of the restrictions applicable to any outstanding
Restricted Stock Award shall lapse and (iii) all or a portion of any outstanding
Performance Award shall be satisfied. The Committee may correct any defect or
supply any omission or reconcile any inconsistency in the Plan or in any Option,
Restricted Stock Award or Performance Award agreement in the manner and to the
extent it shall deem expedient to carry it into effect, and it shall be the sole
and final judge of such expediency. The determinations of the Committee on
matters referred to in this Paragraph 4 shall be conclusive.
The Committee shall act by majority action at a meeting, except that action
permitted to be taken at a meeting may be taken without a meeting if written
consent thereto is given by all members of the Committee.
5. GRANTS OF OPTIONS, RESTRICTED STOCK AWARDS AND PERFORMANCE AWARDS; SHARES
SUBJECT TO THE PLAN
The Committee may from time to time grant both "incentive stock options"
under Section 422 of the Code and nonqualified options to purchase shares of
Common Stock (with or without SARs), Restricted Stock Awards and Performance
Awards to one or more officers, key employees or directors (or persons expected
to become officers, key employees or directors) determined by it to be eligible
for participation in accordance with the provisions of Paragraph 6 and providing
for the issuance of such number of shares and, in the case of Performance
Awards, having such value as in the discretion of the Committee may be fitting
and proper. Subject to Paragraph 10, not more than 8,000,000 shares of Common
Stock shall be available under the Plan upon exercise of Options or SARs or
pursuant to Restricted Stock Awards or Performance Awards granted under the
Plan. Performance Awards which may be exercised or paid only in cash shall not
affect the number of shares of Common Stock available for issuance under the
Plan.
The Common Stock to be offered under the Plan pursuant to Options, SARS,
Restricted Stock Awards and Performance Awards may be Common Stock previously
issued and outstanding and reacquired by the Corporation or newly issued shares.
The number of shares of Common Stock available under the Plan shall be
reduced by the sum of the aggregate number of shares of Common Stock which
become subject to outstanding Options, Restricted Stock Awards and outstanding
Performance Awards which may be paid in part or solely in shares of Common
Stock. To the extent (i) that an outstanding Option expires or terminates
unexercised or is canceled or forfeited (other than in connection with the
exercise of an SAR for Common Stock as set forth in the immediately following
sentence) or (ii) that an outstanding Restricted Stock Award or outstanding
Performance Award which may be paid in part or solely in shares of Common Stock
expires or terminates without vesting or is canceled or forfeited or (iii)
shares of Common Stock are withheld or delivered pursuant to the provisions on
Share Withholding set forth in Paragraph 11 (A), then the shares of Common Stock
subject to such expired, terminated, unexercised, canceled or forfeited portion
of such Option, Restricted Stock Award or Performance Award, or the shares of
Common Stock so withheld or delivered, shall again be available under the Plan.
In the event all or a portion of an SAR is exercised, the number of shares of
Common Stock subject to the related Option (or portion thereof) shall again be
available under the Plan, except to the extent that shares of Common Stock were
actually issued upon exercise of the SAR.
To the extent necessary for an award hereunder to be qualified
performance-based compensation under Section 162(m) of the Code and the rules
and regulations thereunder, the maximum number of shares of Common Stock with
respect to which Options, SARs, Restricted Stock Awards or Performance Awards or
a combination thereof may be granted during any calendar year to any person
shall be 1,000,000 subject to adjustment as provided in Paragraph 10. Grants of
Options, Restricted Stock Awards or Performance Awards that are canceled shall
count toward the maximum stated in the preceding sentence.
<PAGE>
6. ELIGIBILITY
Options, Restricted Stock Awards and Performance Awards may be granted only
to persons who, at the time of the grant or award, are officers, other key
employees or directors of the Corporation or any of its present and future
subsidiaries within the meaning of Section 424(f) of the Code (herein called
subsidiaries) or such persons expected to become such officers, key employees or
directors. Options, Restricted Stock Awards or Performance Awards, or any
combination thereof, may be granted on one or more occasions to the same person.
A person who has received or is eligible to receive options to purchase stock of
any subsidiary of the Corporation or incentive awards from any subsidiary of the
Corporation will not, by reason thereof, be ineligible to receive Options,
Restricted Stock Awards or Performance Awards under the Plan unless prohibited
by the plan of such subsidiary.
Nothing in the Plan or any Option, Restricted Stock Award or Performance
Award agreement shall be construed to constitute or be evidence of an agreement
or understanding, expressed or implied, on the part of the Corporation or its
subsidiaries to employ any person for any specific period of time.
7. OPTIONS AND SARS
(A) Number of Shares. The Committee may, in its discretion, grant Options
to such eligible persons as may be selected by the Committee. The Committee
may, in its discretion, establish Performance Measures which shall be
satisfied or met as a condition to the grant of an Option. With respect to
each Option, the Committee shall determine the number of shares subject to
the Option and the manner and the time of exercise of such Option. The
Committee shall make such other determinations which in its discretion are
fitting and proper.
(B) Stock Option Agreement. Each Option shall be evidenced by a stock
option agreement in such form containing such provisions not inconsistent
with the provisions of the Plan as the Committee from time to time shall
approve, including, without limitation, provisions to qualify certain
Options as "incentive stock options" under Section 422 of the Code. An
incentive stock option may not be granted to any person who is not an
employee of the Corporation or any parent or subsidiary (as defined in
Section 424 of the Code). Each incentive stock option shall be granted
within ten years of the earlier of the date the Plan is adopted by the
Corporation's Board of Directors and the date the Plan is approved by the
stockholders of the Corporation. To the extent that the aggregate fair
market value (determined as of the date of grant) of shares of Common Stock
with respect to which Options designated as incentive stock options are
exercisable for the first time by a person during any calendar year exceeds
the amount (currently $100,000) established by the Code, such Options shall
be deemed to be nonqualified stock options.
(C) Option Price and Term of Option. The purchase price per share of the
Common Stock under each Option shall be determined by the Committee;
provided, however, that such purchase price shall not be less than 100% of
the fair market value of the Common Stock at the date such Option is
granted; provided, further, that if an incentive stock option shall be
granted to any person who, at the time such Option is granted, owns capital
stock of the Corporation possessing more than ten percent of the total
combined voting power of all classes of capital stock of the Corporation (or
of any parent or subsidiary of the Corporation) (a "Ten Percent Holder"),
such purchase price shall be the price (currently 110% of fair market value)
required by the Code in order to constitute an incentive stock option.
The period during which an Option may be exercised shall be determined
by the Committee; provided, however, that no incentive stock option shall be
exercised later than ten years after its date of grant; provided further,
that if an incentive stock option shall be granted to a Ten Percent Holder,
such option shall not be exercised later than five years after its date of
grant. The Committee may, in its discretion, establish Performance Measures
which shall be satisfied or met as a condition to the exercisability of all
or a portion of an Option. The Committee shall determine whether an Option
shall become exercisable in cumulative or non-cumulative installments and in
part or in full at any
<PAGE>
time. An exercisable Option, or portion thereof, may be exercised only with
respect to whole shares of Common Stock.
(D) Payment. An Option may be exercised by giving written notice to the
Corporation specifying the number of shares of Common Stock to be purchased
and accompanied by payment of the purchase price in full (or arrangement
made for such payment to the Corporation's satisfaction). As set forth in
the agreement evidencing the Option, the purchase price may be paid (a) in
cash or (b) by delivery (either actual delivery or by attestation procedures
established by the Corporation) of previously-owned whole shares of Common
Stock (for which the holder has good title, free and clear of all liens and
encumbrances and which such holder either (i) has held for at least six
months or (ii) has purchased on the open market) valued at their fair market
value on the date of exercise. If applicable, a person exercising an Option
shall surrender to the Corporation any SARs which are canceled by reason of
the exercise of such Option.
(E) Termination of Employment or Service or Death of Holder. In the
event of any termination of the employment or service of a Holder with the
Corporation or one of its subsidiaries, other than by reason of death or, in
the case of a Holder of a nonqualified option, Retirement, the Holder may
(unless otherwise provided in the Option agreement) exercise each Option
held by such Holder at any time within three months (or one year if the
Holder is permanently and totally disabled within the meaning of Section
22(e)(3) of the Code) after such termination of employment or service, but
only if and to the extent such Option is exercisable at the date of such
termination of employment or service, and in no event after the date on
which such Option would otherwise terminate; provided, however, that if such
termination of employment or service is for cause or voluntary on the part
of the Holder without the written consent of the Corporation, any Option
held by such Holder under the Plan shall terminate unless otherwise provided
in the Option agreement.
In the event of the termination of employment or service of a Holder of
a nonqualified option by reason of Retirement, then each nonqualified option
held by the Holder shall be fully exercisable, and, subject to the following
paragraph, such nonqualified option shall be exercisable by the Holder at
any time up to and including (but not after) the date on which the
nonqualified option would otherwise terminate (unless otherwise provided in
the Option agreement).
Unless otherwise provided in the Option agreement, in the event of the
death of a Holder (i) while employed by or providing service to the
Corporation or one of its subsidiaries or after Retirement, (ii) within
three months after termination of the Holder's employment, other than a
termination by reason of death, Retirement or permanent and total disability
within the meaning of Section 22(e)(3) of the Code, or (iii) within one year
after termination of the Holder's employment by reason of such disability,
then each Option held by such Holder may be exercised by the legatees of the
Holder under his last will, or by his personal representatives or
distributees, at any time within a period of nine months after the Holder's
death, but only if and to the extent such Option is exercisable at the date
of death (unless death occurs while the Holder is employed by or providing
service to the Corporation or one of its subsidiaries, in which case each
Option held by the Holder shall be fully exercisable), and in no event after
the date on which such Option would otherwise terminate.
(F) Privileges of the Holder as Stockholder. The Holder shall be
entitled to all the privileges and rights of a stockholder with respect only
to such shares of Common Stock as have been actually purchased under the
Option and registered in the Holder's name.
(G) SARs. The Committee may, in its sole discretion, grant an SAR
(concurrently with the grant of the Option or, in the case of a nonqualified
option which is not intended to be qualified performance-based compensation
under Section 162(m) of the Code and the rules and regulations thereunder,
subsequent to such grant) to any Holder of any Option granted under the Plan
(or such Holder's legatees, personal representatives or distributees then
entitled to exercise such Option). The Committee may, in its discretion,
establish Performance Measures which shall be satisfied or met as a
condition to the grant of an SAR or to the exercisability of all or a
portion of an SAR. An SAR may be exercised (i) by giving written notice to
the Corporation specifying the number of SARs which are
<PAGE>
being exercised and (ii) by surrendering to the Corporation any Options
which are canceled by reason of the exercise of the SAR. An SAR shall be
exercisable upon such additional terms and conditions as may from time to
time be prescribed by the Committee. No fractional share shall be issued
upon the exercise of any SAR.
(H) Non-Transferability. Unless otherwise specified in the agreement
evidencing an Option or SAR, no Option or SAR hereunder shall be
transferable other than by will or the laws of descent and distribution or
pursuant to beneficiary designation procedures approved by the Corporation.
Except to the extent permitted by the foregoing sentence, each Option or SAR
may be exercised during the Holder's lifetime only by the Holder or the
Holder's legal representative or similar person. Except as permitted by the
second preceding sentence, no Option or SAR hereunder shall be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise
disposed of (whether by operation of law or otherwise) or be subject to
execution, attachment or similar process. Upon any attempt to so sell,
transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any
Option or SAR hereunder, such Option or SAR and all rights thereunder shall
immediately become null and void.
8. RESTRICTED STOCK AWARDS
(A) Restriction Period to Be Established by the Committee. At the time of
the making of a Restricted Stock Award, the Committee shall establish a
period of time (the "Restriction Period") applicable to such award. The
Committee may establish different Restriction Periods from time to time and
each Restricted Stock Award may have a different Restriction Period, in the
discretion of the Committee. The Committee may, in its discretion, establish
Performance Measures which shall be satisfied or met during the Restriction
Period as a condition to the vesting of all or a portion of the shares of
Common Stock subject to a Restricted Stock Award and for the forfeiture of
all or a portion of such shares if such Performance Measures shall not be
satisfied or met during the Restriction Period. Notwithstanding anything
contained herein to the contrary, in the case of a Restricted Stock Award
intended to be qualified performance-based compensation under Section 162(m)
and the rules and regulations thereunder, shares of Common Stock subject
thereto shall not be vested until the Committee certifies in writing that
the applicable Performance Measures for the performance period have in fact
been achieved.
(B) Other Terms and Conditions. Common Stock, when awarded pursuant to a
Restricted Stock Award, shall be represented by a stock certificate or
book-entry credits registered in the name of the Holder who receives the
Restricted Stock Award or a nominee for the benefit of the Holder. The
Holder shall have the right to receive dividends (or the cash equivalent
thereof) during the Restriction Period and shall also have the right to vote
such Common Stock and all other stockholder rights (in each case unless
otherwise provided in the agreement evidencing the Restricted Stock Award),
with the exception that (i) the Holder shall not be entitled to delivery of
the stock certificate (or the removal of restrictions in the Corporation's
books and records) until the Restriction Period established by the Committee
pursuant to Paragraph 8(A) shall have expired or lapsed, (ii) the
Corporation shall retain custody of the stock certificate during the
Restriction Period, (iii) the Holder may not sell, transfer, pledge,
exchange, hypothecate or dispose of such Common Stock during the Restriction
Period, and (iv) a breach of restriction or breach of terms and conditions
established by the Committee pursuant to the Restricted Stock Award shall
cause a forfeiture of the Restricted Stock Award. If requested by the
Corporation, a Holder of a Restricted Stock Award shall deposit with the
Corporation stock powers or other instruments of assignment (including a
power of attorney), each endorsed in blank with a guarantee of signature if
deemed necessary or appropriate by the Corporation, which would permit
transfer to the Corporation of all or a portion of the shares of Common
Stock subject to the Restricted Stock Award in the event such award is
forfeited in whole or in part. A distribution with respect to shares of
Common Stock, other than a distribution in cash, shall be subject to the
same restrictions as the shares of Common Stock with respect to which such
distribution was made, unless otherwise determined by the Committee. The
Committee may, in addition, prescribe additional restrictions, terms or
conditions upon or to the Restricted Stock Award in the manner
<PAGE>
prescribed by Paragraph 4. The Committee may, in its sole discretion, also
establish rules pertaining to the Restricted Stock Award in the event of
termination of employment or service (by Retirement, disability, death or
otherwise) of a Holder of such award prior to the expiration of the
Restriction Period.
(C) Restricted Stock Award Agreement. Each Restricted Stock Award shall
be evidenced by an agreement in such form and containing such provisions not
inconsistent with the provisions of the Plan as the Committee from time to
time shall approve.
(D) Payment for Restricted Stock. Restricted Stock Awards may be made by
the Committee whereby the Holder receives Common Stock subject to those
terms, conditions and restrictions established by the Committee but is not
required to make any payment for said Common Stock. The Committee may also
establish terms as to each Holder whereby such Holder, as a condition to the
Restricted Stock Award, is required to pay, in cash or other consideration,
all (or any lesser amount than all) of the fair market value of the Common
Stock, determined as of the date the Restricted Stock Award is made.
(E) Termination of Employment or Service or Death of Holder. A
Restricted Stock Award shall terminate for all purposes if the Holder does
not remain continuously in the employ or service of the Corporation or a
subsidiary at all times during the applicable Restriction Period, except as
may otherwise be determined by the Committee.
9. PERFORMANCE AWARDS
(A) Performance Period. The Committee shall establish with respect to
each Performance Award a performance period over which performance shall be
measured. The performance period shall be established at the time of such
award.
(B) Performance Awards. Each Performance Award shall have a maximum
value established by the Committee at the time of such award.
(C) Performance Measures. Performance Awards shall be awarded to an
eligible person contingent upon future performance of the Corporation and/or
the Corporation's subsidiary, division or department in which such person is
employed over the performance period. The Committee shall establish the
Performance Measures applicable to such performance.
(D) Award Criteria. In determining the value of Performance Awards, the
Committee shall take into account an eligible person's responsibility level,
performance, potential, cash compensation level, unexercised stock options,
other incentive awards and such other considerations as it deems
appropriate. Notwithstanding the preceding sentence, to the extent necessary
for a Performance Award payable in cash to be qualified performance-based
compensation under Section 162(m) of the Code and the rules and regulations
thereunder, the maximum amount that may be paid under all such Performance
Awards to anyone person during any period of three calendar years shall be
$10,000,000.
(E) Payment. Following the end of each performance period, the Holder of
each Performance Award shall be entitled to receive payment of an amount,
not exceeding the maximum value of the Performance Award, based on the
achievement of the Performance Measures for such performance period, as
determined by the Committee. Payment of Performance Awards may be made
wholly in cash, wholly in shares of Common Stock or a combination thereof,
all at the discretion of the Committee. Payment shall be made in a lump sum
or in installments, and shall be subject to such vesting and other terms and
conditions as may be prescribed by the Committee for such purpose.
Notwithstanding anything contained herein to the contrary, in the case of a
Performance Award intended to be qualified performance-based compensation
under Section 162(m) and the rules and regulations thereunder, no payment
shall be made under any such Performance Award until the Committee certifies
in writing that the Performance Measures for the performance period have in
fact been achieved.
<PAGE>
(F) Termination of Employment or Service or Death of Holder. A
Performance Award shall terminate for all purposes if the Holder does not
remain continuously in the employ or service of the Corporation or a
subsidiary at all times during the applicable performance period, except as
may otherwise be determined by the Committee.
In the event that a Holder of a Performance Award ceases to be an
employee or director of the Corporation following the end of the applicable
performance period but prior to full payment according to the terms of the
Performance Award, payment shall be made in accordance with terms
established by the Committee for the payment of such Performance Award.
(G) Other Terms and Conditions. When a Performance Award is payable in
installments in Common Stock, if determined by the Committee, one or more
stock certificates or book-entry credits registered in the name of the
Holder representing shares of Common Stock which would have been issuable to
the Holder of the Performance Award if such payment had been made in full on
the day following the end of the applicable performance period may be
registered in the name of such Holder, and during the period until such
installment becomes due such Holder shall have the right to receive
dividends (or the cash equivalent thereof) and shall also have the right to
vote such Common Stock and all other stockholder rights (in each case unless
otherwise provided in the agreement evidencing the Performance Award), with
the exception that (i) the Holder shall not be entitled to delivery of any
stock certificate until the installment payable in shares becomes due,
(ii) the Corporation shall retain custody of any stock certificates until
such time and (iii) the Holder may not sell, transfer, pledge, exchange,
hypothecate or dispose of such Common Stock until such time. A distribution
with respect to shares of Common Stock payable in installments which has not
become due, other than a distribution in cash, shall be subject to the same
restrictions as the shares of Common Stock with respect to which such
distribution was made, unless otherwise determined by the Committee.
(H) Performance Award Agreements. Each Performance Award shall be
evidenced by an agreement in such form and containing such provisions not
inconsistent with the provisions of the Plan as the Committee from time to
time shall approve.
10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CHANGE IN CONTROL
(A) Notwithstanding any other provision of the Plan, (i) the number and
class of securities or other consideration subject to any Option or to be
delivered pursuant to any Restricted Stock Award or Performance Award and
(ii) the Option or Restricted Stock Award price shall be appropriately
adjusted by the Committee, whose determination shall be conclusive, in the
event of a stock split, stock dividend, spin-off, split-up,
recapitalization, merger, consolidation, combination or exchange of shares,
or the like. In such event, the maximum number and class of securities
available under the Plan, and the number and class of securities subject to
Options, SARs, Restricted Stock Awards or Performance Awards, shall be
appropriately adjusted by the Committee, whose determination shall be
conclusive.
(B) (i) In the event of a "change in control" (as hereinafter defined)
pursuant to subparagraph (C)(i) or (ii) below, or in the event of a change
in control pursuant to subparagraph (C)(iii) or (iv) below in connection
with which the holders of Common Stock receive consideration other than
shares of common stock that are registered under Section 12 of the Exchange
Act:
(1) (x) each Option granted under the Plan shall be exercisable in
full, (y) each Holder of an Option shall receive from the Corporation
within 60 days after the change in control, in exchange for the surrender
of the Option or any portion thereof to the extent the Option is then
exercisable in accordance with clause (x), an amount in cash equal to the
difference between the fair market value (as determined by the Committee)
on the date of the change in control of the Common Stock covered by the
Option or portion thereof which is so surrendered and the purchase price
of such Common Stock under the Option and (z) each SAR shall be
surrendered by the Holder thereof and shall be canceled simultaneously
with the cancellation of the related Option, provided, however, that the
Committee shall have the discretion to provide that there
<PAGE>
shall be substituted for such shares of Common Stock subject to an
outstanding Option a number and a class of securities of the entity
effecting the change in control such that the purchase price per security
shall be appropriately adjusted by the Committee (whose determination
shall be conclusive), such adjustments to be made without any increase in
the aggregate purchase price;
(2) each Holder of a Restricted Stock Award shall receive from the
Corporation within 60 days after the change in control, in exchange for
the surrender of the Restricted Stock Award, an amount in cash equal to
the difference between the fair market value (as determined by the
Committee) on the date of the change in control of the Common Stock
subject to the Restricted Stock Award and the purchase price, if any, of
such Common Stock;
(3) each Holder of a Performance Award for which the performance
period has not expired shall receive from the Corporation within 60 days
after the change in control, in exchange for the surrender of the
Performance Award, an amount in cash equal to the product of the value of
the Performance Award and a fraction, the numerator of which is the
number of whole months which have elapsed from the beginning of the
performance period to the date of the change in control, and the
denominator of which is the number of whole months in the performance
period; and
(4) each Holder of a Performance Award that has been earned but not
yet paid shall receive an amount in cash equal to the value of the
Performance Award.
(ii) Notwithstanding any other provision of the Plan or any agreement
relating to an Option, Restricted Stock Award or Performance Award, in the
event of a change in control pursuant to subparagraph (C)(iii) or
(iv) below in connection with which the holders of Common Stock receive
shares of common stock that are registered under Section 12 of the Exchange
Act:
(1) each Option and SAR granted under the Plan shall be exercisable
in full;
(2) the Restriction Period applicable to any outstanding Restricted
Stock Award shall lapse and, if applicable, any other restrictions, terms
or conditions shall lapse and/or be deemed to be satisfied at the maximum
value or level;
(3) the Performance Measures applicable to any outstanding
Performance Award shall be deemed to be satisfied at the maximum value;
and
(4) there shall be substituted for each share of Common Stock
remaining available under the Plan, whether or not then subject to an
outstanding Option (and SAR), Restricted Stock Award or Performance
Award, the number and class of shares into which each outstanding share
of Common Stock shall be converted pursuant to such change in control. In
the event of any such substitution, the purchase price per share in the
case of an Option or Restricted Stock Award shall be appropriately
adjusted by the Committee (whose determination shall be conclusive), such
adjustments to be made without any increase in the aggregate purchase
price.
(C) For purposes of this paragraph, the term "change in control" shall
mean:
(i) the acquisition by any individual, entity or group (a "Person"),
including any "person" within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act, of beneficial ownership within the meaning
of Rule 13d-3 promulgated under the Exchange Act, of cumulatively, 25% or
more of either (x) the then outstanding shares of common stock of the
Corporation (the "Outstanding Common Stock") or (y) the combined voting
power of the then outstanding securities of the Corporation entitled to
vote generally in the election of directors (the "Outstanding Voting
Securities"); excluding, however, the following: (1) any acquisition
directly from the Corporation (excluding any acquisition resulting from
the exercise of an exercise, conversion or exchange privilege unless the
security being so exercised, converted or exchanged was acquired directly
from the Corporation), (2) any acquisition by the Corporation, (3) any
acquisition by an employee benefit plan (or related trust) sponsored or
maintained by the Corporation or any corporation controlled by the
Corporation; (4) any acquisition by any corporation pursuant to a
transaction which complies with clauses (1), (2) and (3) of clause
(iii) in this definition of change
<PAGE>
in control; or (5) any acquisition by PepsiCo, Inc., a North Carolina
corporation, or any affiliate thereof (collectively, "PepsiCo"), provided
that following such acquisition, PepsiCo does not own more than 49% of
the Outstanding Common Stock or Outstanding Voting Securities;
(ii) individuals who, as of the effective date of the Plan, constitute
the Board of Directors of the Corporation (the "Incumbent Board") cease
for any reason to constitute at least a majority of such Board; provided,
however, that any individual who becomes a director of the Corporation
subsequent to such effective date whose election, or nomination for
election by the Corporation's stockholders, was approved by the vote of
at least a majority of the directors then comprising the Incumbent Board
shall be deemed a member of the Incumbent Board; and provided further,
that any individual who was initially elected as a director of the
Corporation as a result of an actual or threatened solicitation by a
person or group for the purpose of opposing a solicitation by any other
person or group with respect to the election or removal of directors or
any other actual or threatened solicitation of proxies or consents by or
on behalf of any Person other than the Board of Directors shall not be
deemed a member of the Incumbent Board;
(iii) the consummation of a reorganization, merger or consolidation of
the Corporation or sale or other disposition of all or substantially all
of the assets of the Corporation (a "Corporate Transaction"); excluding,
however, a Corporate Transaction pursuant to which (1) all or
substantially all of the individuals or entities who are the beneficial
owners, respectively, of the Outstanding Common Stock and the Outstanding
Voting Securities immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 66 2/3% of,
respectively, the outstanding shares of common stock, and the combined
voting power of the outstanding securities entitled to vote generally in
the election of directors, as the case may be, of the corporation
resulting from such Corporate Transaction (including, without limitation,
a corporation which as a result of such transaction owns the Corporation
or all or substantially all of the Corporation's assets either directly
or indirectly) in substantially the same proportions relative to each
other as their ownership, immediately prior to such Corporate
Transaction, of the Outstanding Common Stock and the Outstanding Voting
Securities, as the case may be, (2) no Person (other than: the
Corporation; any employee benefit plan (or related trust) sponsored or
maintained by the Corporation or any corporation controlled by the
Corporation; the corporation resulting from such Corporate Transaction;
and any Person which beneficially owned, immediately prior to such
Corporate Transaction, directly or indirectly, 25% or more of the
Outstanding Common Stock or the Outstanding Voting Securities, as the
case may be) will beneficially own, directly or indirectly, 25% or more
of, respectively, the outstanding shares of common stock of the
corporation resulting from such Corporate Transaction or the combined
voting power of the outstanding securities of such corporation entitled
to vote generally in the election of directors and (3) individuals who
were members of the Incumbent Board will constitute at least a majority
of the members of the board of directors of the corporation resulting
from such Corporate Transaction; or
(iv) the consummation of a plan of complete liquidation or dissolution
of the Corporation.
(D) With respect to any Holder of an Option or SAR who is subject to
Section 16 of the Exchange Act, (i) notwithstanding the exercise periods set
forth in Paragraph 7(E) or as set forth pursuant to Paragraph 7(E) in any
agreement evidencing such Option or SAR and (ii) notwithstanding the
expiration date of the term of such Option or SAR, in the event the
Corporation is involved in a business combination which is intended to be
treated as a pooling of interests for financial accounting purposes (a
"Pooling Transaction") or pursuant to which such Holder receives a
substitute option to purchase securities of any entity, including an entity
directly or indirectly acquiring the Corporation, then each Option or SAR
(or option or stock appreciation right in substitution thereof) held by such
Holder shall be exercisable to the extent set forth in the agreement
evidencing such Option or SAR until and including the latest of (x) the
expiration date of the term of the Option or SAR or, in the event of such
Holder's termination of employment or service, the date determined pursuant
to Paragraph 7(E), (y) the date which is six months and ten business days
after the consummation of such
<PAGE>
business combination and (z) the date which is ten business days after the
date of expiration of any period during which such Holder may not dispose of
a security issued in the Pooling Transaction in order for the Pooling
Transaction to be accounted for as a pooling of interests.
11. WITHHOLDING TAXES
(A) If provided in the agreement evidencing an Option, SAR, Restricted
Stock Award or Performance Award, the Holder thereof may elect, by written
notice to the Corporation at the office of the Corporation designated for
that purpose, to pay through withholding by the Corporation all or a portion
of the estimated federal, state, local and other taxes arising from (1) the
exercise of an Option or SAR and (2) the vesting or distribution of shares
of Common Stock pursuant to a Restricted Stock Award or Performance Award
(a) by having the Corporation withhold shares of Common Stock or (b) by
delivering previously-owned shares (collectively, "Share Withholding"), in
each case being such number of shares of Common Stock as shall have a fair
market value equal to the amount of taxes required to be withheld, rounded
up to the nearest whole share; provided, however, that such shares of Common
Stock may not have a fair market value in excess of the amount determined by
applying the minimum statutory withholding rate.
(B) A Share Withholding election shall be subject to disapproval by the
Corporation.
(C) If the date as of which the amount of tax to be withheld is
determined (the "Tax Date") is deferred until after the exercise of an
Option or SAR, the expiration of the Restriction Period applicable to a
Restricted Stock Award or the payment of a Performance Award, and if the
Holder elects Share Withholding, the Corporation may issue to the Holder the
full number of shares of Common Stock, if any, resulting from such exercise,
expiration or payment and the Holder shall be unconditionally obligated to
deliver to the Corporation on the Tax Date such number of shares of Common
Stock as shall have an aggregate fair market value equal to the amount to be
withheld on the Tax Date, rounded up to the nearest whole share.
(D) The fair market value of shares of Common Stock used for payment of
taxes, as provided in this Paragraph 11, shall be the mean sale price per
share, as reported for New York Stock Exchange Composite Transactions, on
the Tax Date.
12. TERMINATION OF PLAN
The Plan may be terminated at any time by the Board of Directors, except
with respect to any Options, SARs, Restricted Stock Awards or Performance Awards
outstanding. The Corporation reserves the right to restrict, in whole or in
part, the exercise of any Options or SARs or the delivery of Common Stock
pursuant to any Restricted Stock Awards or Performance Awards granted under the
Plan until such time as,
(A) any legal requirements or regulations have been met relating to the
issuance of the shares covered thereby or to their registration under the
Securities Act of 1933 or to any applicable State laws; and
(B) satisfactory assurances are received that the shares when issued will
be duly listed on the New York Stock Exchange, Inc.
13. AMENDMENT OF THE PLAN
The Board of Directors may amend the Plan; provided, however, that without
the approval of the stockholders the Board of Directors may not amend the Plan,
subject to Paragraph 10, to (a) increase the maximum number of shares which may
be issued on exercise of Options or SARs or pursuant to Restricted Stock Awards
or Performance Awards granted under the Plan or (b) effect any change
inconsistent with Section 422 of the Code.
<PAGE>
14. EFFECT OF THE PLAN
Neither the adoption of the Plan nor any action of the Board of Directors or
the Committee shall be deemed to give any person any right to be granted any
Option, a right to a Restricted Stock Award or a right to a Performance Award or
any rights hereunder except as may be evidenced by an Option agreement, Stock
Award agreement or Performance Award agreement, duly executed on behalf of the
Corporation, and then only to the extent and on the terms and conditions
expressly set forth therein.
15. GOVERNING LAW
The Plan, each Option, Restricted Stock Award and Performance Award and the
related agreement, and all determinations made and actions taken pursuant
thereto, to the extent not otherwise governed by the Code or the laws of the
United States, shall be governed by the laws of the State of Delaware and
construed in accordance therewith without giving effect to principles of
conflicts of laws.
16. FOREIGN EMPLOYEES
Without amending the Plan, the Committee may grant awards to eligible
persons who are foreign nationals on such terms and conditions different from
those specified in the Plan as may in the judgment of the Committee be necessary
or desirable to foster and promote achievement of the purposes of the Plan and,
in furtherance of such purposes the Committee may make such modifications,
amendments, procedures, subplans and the like as may be necessary or advisable
to comply with provisions of laws in other countries or jurisdictions in which
the Company or its subsidiaries operates or has employees.
<PAGE>
EXHIBIT 4.5
WHITMAN CORPORATION
FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT
NONQUALIFIED STOCK OPTION AGREEMENT dated as of _______, 2000,
between WHITMAN CORPORATION, a Delaware corporation (the
"Corporation"), and ___________ an employee of the Corporation or
one of its subsidiaries (the "Holder").
WHEREAS, the Corporation desires, by affording the Holder
an opportunity to purchase shares of the Corporation's Common Stock as
hereinafter provided, to carry out the purposes of the Corporation's 2000
Stock Incentive Plan (the "Plan");
WHEREAS, the Management Resources and Compensation
Committee of the Board of Directors of the Corporation (the "Committee") has
duly made all determinations necessary or appropriate to the grant hereof;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter set forth and for other good and valuable
consideration, receipt of which is hereby acknowledged, the parties hereto
have agreed, and do hereby agree, as follows:
1. The Corporation hereby irrevocably grants to the Holder, as
a matter of separate agreement and not in lieu of salary or any other
compensation for services, the right and option (the "Option"), to purchase
_______ shares of Common Stock of the Corporation on the terms and conditions
herein set forth.
2. For each of said shares purchased, the Holder shall pay to
the Corporation $______per share (the "Option Price").
3. Subject to the provisions of paragraphs 7, 8 and 9 hereof,
this Option shall be for a term of ten years from the date hereof and shall
become exercisable as to one-third of the shares covered by this Option on
the first anniversary hereof, as to two-thirds of the shares covered by this
Option on the second anniversary hereof (reduced by such number of shares as
may have theretofore been purchased hereunder after the first anniversary),
and as to all shares covered by this Option and not theretofore purchased on
the third anniversary hereof. The Corporation shall not be required to issue
any fractional shares upon exercise of this Option, and any fractional
interests resulting from the calculation of the number of shares in respect
of which this Option may be exercised prior to the third anniversary hereof
shall be rounded down to the nearest whole share. Except as provided in
paragraphs 6, 7, 8 and 9 hereof, this Option may not be exercised unless the
Holder shall, at the time of exercise, be an employee of the Corporation or
one of its "subsidiaries", as defined in the Plan.
4. This Option may be exercised only by one or more notices in
writing of the Holder's intent to exercise this Option, accompanied by
payment by check to the Corporation in
<PAGE>
an amount equal to the aggregate Option Price of the total number of whole
shares then being purchased. Unless otherwise specified by the Corporation,
each such notice and check shall be delivered to Muriel E. Ramsey, Manager of
Administrative Services, at the principal office of the Corporation or, at
the risk of the Holder, mailed to said Muriel E. Ramsey at said office.
5. Following the exercise of this Option, the Corporation
will advise the Holder of the applicable Federal, state and FICA taxes
required to be withheld by reason of such exercise. Thereupon, the Holder
shall forthwith deliver to the Corporation a check payable to the Corporation
or the subsidiary of the Corporation which employs the Holder, as the case
may be, representing said taxes.
6. Except as otherwise provided in this paragraph 6, this
Option is not transferable by the Holder otherwise than by will or the laws
of descent and distribution and may be exercised, during the lifetime of the
Holder, only by the Holder. Notwithstanding anything herein which would
otherwise limit the transferability of this Option, this Option may be
transferred by the Holder to (i) the spouse, children or grandchildren of the
Holder ("Immediate Family Members"); (ii) a trust or trusts for the exclusive
benefit of such Immediate Family Members; (iii) a Revocable Living Trust; or
(iv) a partnership in which such Immediate Family Members are the only
partners, in any case provided that (x) there is no consideration for any
such transfer and (y) subsequent transfers of transferred Options shall be
prohibited except transfers to those persons or entities to which the Holder
could have transferred this Option or transfers otherwise in accordance with
this Option. Following transfer, this Option shall continue to be subject to
the same terms and conditions as were applicable immediately prior to
transfer, except that the term "Holder", for purposes of any permitted
exercise of this Option, shall be deemed to refer to the transferee, it being
understood that the events of termination of employment and death following
termination of employment set forth in paragraphs 7, 8 and 9 hereof shall
continue to be applied with respect to the original Holder, following which
this Option shall be exercisable by the transferee only to the extent, and
for the periods specified in, such paragraphs. The Corporation disclaims any
obligation to provide notice to a transferee of circumstances (including,
without limitation, termination of employment of the original Holder) which
may result in early termination of this Option.
7. In the event of the termination of employment of the
Holder with the Corporation or one of its subsidiaries, other than by reason
of Retirement (as defined in the Plan) or death, the Holder may exercise this
Option at any time within three months (or one year, if the Holder is
permanently and totally disabled within the meaning of Section 22(e)(3) of
the Federal Internal Revenue Code) after such termination of employment, but
only if and to the extent this Option was exercisable at the date of
termination, and in no event after the date on which this Option would
otherwise terminate; provided, however, if such termination of employment is
for cause or a voluntary termination on the part of the Holder without the
written consent of the Corporation, then this Agreement shall be of no
further force or effect and all rights of the Holder under this Option shall
thereupon cease.
8. In the event of the termination of employment of the
Holder with the Corporation or one of its subsidiaries by reason of
Retirement, then all shares subject to this
<PAGE>
Option shall be fully exercisable, and this Option shall be exercisable by
the Holder at any time up to and including (but not after) the date on which
this Option would otherwise terminate.
9. In the event of the death of the Holder (i) while
employed by the Corporation or one of its subsidiaries or after Retirement,
(ii) within three months after termination of the Holder's employment (other
than a termination by reason of permanent and total disability within the
meaning of Section 22(e)(3) of the Federal Internal Revenue Code), or (iii)
within one year after termination of the Holder's employment by reason of
such disability, then all shares subject to this Option shall be fully
exercisable and this Option may be exercised by the legatees under the last
will of the Holder, or by the personal representatives or distributees of the
Holder, at any time within a period of one year after the Holder's death, but
in no event after the date on which this Option would otherwise terminate.
10. If, prior to the termination of this Option, the number
of outstanding shares of Common Stock of the Corporation shall be increased
or decreased by reason of a stock split, stock dividend, reverse stock split
or combination thereof, then the number of shares at the time subject to this
Option, the number of shares reserved for issuance pursuant to exercise
hereof, and the Option Price per share shall be proportionately adjusted
without any change in the aggregate Option Price therefor.
11. If, prior to the termination of this Option, the
outstanding shares of Common Stock of the Corporation shall be affected by
any change other than those specifically mentioned in the preceding paragraph
(e.g., by reason of a spin-off, split-up, recapitalization, merger,
consolidation, combination or exchange of shares), then the aggregate number
and class of shares thereafter subject to this Option and the Option Price
thereof, and the number and class of shares reserved for issuance pursuant to
exercise hereof, may be appropriately adjusted in such manner as the
Committee shall in its sole discretion determine to be equitable and
consistent with the purposes of the Plan. Such determination shall be
conclusive for all purposes of this Option.
12. This Option and each and every obligation of the
Corporation hereunder are subject to the requirement that if at any time the
Corporation shall determine, upon advice of counsel, that the listing,
registration, or qualification of the shares covered hereby upon any
securities exchange or under any state or Federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of or in connection with the granting of this Option or the
purchase of shares hereunder, this Option may not be exercised in whole or in
part unless and until such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Board of Directors of the Corporation.
13. In the event of a "change in control" or a "Pooling
Transaction", as those terms are defined in the Plan, the Holder shall have
all of the rights specified in Paragraph 10(B) and, if applicable, Paragraph
10(D) of the Plan.
14. Nothing herein contained shall confer on the Holder any
right to continue in the employment of the Corporation or any of its
subsidiaries or interfere in any way with the
<PAGE>
right of the Corporation or any subsidiary to terminate the Holder's
employment at any time; confer on the Holder any of the rights of a
shareholder with respect to any of the shares subject to this Option until
such shares shall be issued upon the exercise of this Option; affect the
Holder's right to participate in and receive benefits under and in accordance
with the provisions of any pension, profit-sharing, insurance, or other
employee benefit plan or program of the Corporation or any of its
subsidiaries; or limit or otherwise affect the right of the Board of
Directors of the Corporation (subject to any required approval by the
shareholders) at any time or from time to time to alter, amend, suspend or
discontinue the Plan and the rules for its administration; provided, however,
that no termination or amendment of the Plan may, without the consent of the
Holder, adversely affect the Holder's rights under this Option.
IN WITNESS WHEREOF, this Nonqualified Stock Option Agreement
has been duly executed by the Corporation and the Holder as of the day and
year first above written.
WHITMAN CORPORATION
By: ________________________________
Senior Vice President
--------------------------------
Holder
<PAGE>
EXHIBIT 5
SIDLEY & AUSTIN
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
DALLAS ONE FIRST NATIONAL PLAZA WASHINGTON, D.C.
______ CHICAGO, ILLINOIS 60603 ______
LOS ANGELES TELEPHONE 312 853 7000 LONDON
______ FACSIMILE 312 853 7036 ______
NEW YORK SINGAPORE
FOUNDED 1866 ______
TOKYO
May 12, 2000
Whitman Corporation
3501 Algonquin Road
Rolling Meadows, Illinois 60008
Re: Whitman Corporation
REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have acted as counsel for Whitman Corporation, a
Delaware corporation (the "Company"), in connection with the filing of a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), relating to the
registration of 8,000,000 shares of common stock, par value $.01, of the
Company (the "Registered Shares") together with the 8,000,000 preferred stock
purchase rights (the "Registered Rights") associated therewith to be offered
to participants in the Whitman Corporation 2000 Stock Incentive Plan (the
"Plan"). The terms of the Registered Rights are set forth in the Rights
Agreement, dated as of May 20, 1999, between the Company and First Chicago
Trust Company of New York (the "Rights Agreement").
We are familiar with the proceedings to date with respect
to the proposed issuance and sale of the Registered Shares and the Registered
Rights and have examined such records, documents and questions of law and
satisfied ourselves as to such matters of fact, as we have considered
relevant and necessary as a basis for this opinion.
Based upon the foregoing, we are of the opinion that:
1. The Company is duly incorporated and validly existing
under the laws of the State of Delaware.
2. Each Registered Share which is newly issued pursuant
to the Plan will be legally issued, fully paid and nonassessable when: (i)
the Registration Statement shall have become effective under the Securities
Act; (ii) the Company's Board of Directors or a duly authorized committee
thereof shall have duly adopted final resolutions authorizing the issuance
and sale of such Registered Share as contemplated by the Plan; (iii) such
Registered Share shall have been duly issued and sold in the manner
<PAGE>
contemplated by the Plan; and (iv) a certificate representing such Registered
Share shall have been duly executed, countersigned and registered and duly
delivered to the purchaser thereof against payment of the agreed
consideration therefor (not less than the par value thereof) in accordance
with the Plan.
3. The Registered Right associated with each Registered
Share referred to in paragraph 2 will be validly issued when (i) such
Registered Right shall have been duly issued in accordance with the terms of
the Rights Agreement and (ii) such associated Registered Share shall have
been duly issued and paid for as set forth in paragraph 2.
We do not find it necessary for the purposes of this
opinion to cover, and accordingly we express no opinion as to, the
application of the securities or blue sky laws of the various states to the
sale of the New Shares.
This opinion is limited to the General Corporation Law of
the State of Delaware.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to all references to our firm
included in or made a part of the Registration Statement.
Very truly yours,
/s/ Sidley & Austin
<PAGE>
EXHIBIT 23.1
The Board of Directors
Whitman Corporation:
We consent to the incorporation by reference in the registration statement
(No. 333-____) on Form S-8 of Whitman Corporation of our report dated
February 1, 2000, relating to the consolidated balance sheets of Whitman
Corporation and subsidiaries as of the end of fiscal years 1999 and 1998, and
the related consolidated statements of income, shareholders' equity and cash
flows for each of the fiscal years 1999, 1998, and 1997, which report appears
in the fiscal 1999 annual report on Form 10-K.
/s/ KPMG LLP
Chicago, Illinois
May 11, 2000